Should You Invest In Community Banks?

  • Community banks are boring and very unexciting.
  • The community banking space has lack of investor attention, leaving some of these banks trading for low multiples.
  • The lack of competition in the community banking space should be compelling for the investor in search of alpha.

When I first started dabbling in the investment world, I always avoided banks. The reason was simple, banks just seemed too hard to value and understand. Furthermore, all of the investors that I talked to wholly avoided banks for the same reason.

There was one exception. I found out a local bank that I had been banking at my whole life was a public company; Independent Bank Corporation (NASDAQ:IBCP). After doing very little due diligence, I proceeded to buy the stock, making a quick return in a very short time.

The entirety of the article can be found at Seeking Alpha.

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